Investors had, in selling corn heavily earlier this week, braced
for the USDA reports to indicate even looser supplies of corn than previously
forecast, with farmers apparently talking of better-than-expected yields, and
US exports facing challenges.

Indeed, the data implied that feed use in the three months
to December 1, "at just over 2.4bn bushels is a record for the quarter, just
eclipsing" the figure for the same quarter of 2007-08, CHE Hedging said.

'Bought some demand'

Sure, US corn inventories are still expected to double over
2013-14.

"With carryover stocks of 1.6bn bushels, we still have a
surplus of corn," Steve Kahler, chief operating officer of Teucrium Trading, an
issuer of commodity exchange traded products, said,

"But low prices have bought some demand."

Some other investors went further.

"These numbers are supportive and could open the door for a
move up to $4.40 a bushel in Chicago's March futures contract," Darrell Holaday
at Country Futures said.

'Shift in sentiment'

CHS Hedging said: "With supply now clearly defined and signs
of demand strength, this report should mark a shift in sentiment even though
the supplies remain ample."

Certainly, funds were estimated to have bought 30,000
contracts over the day, more than offsetting the sale of 27,000 lots during the
previous three sessions.

Corn futures for March closed up 5.0% at $4.32 ¾ a bushel,
retaking 10-day, 20-day and 50-day moving averages in one swoop, the latter of
which the contract had closed over only once previously in the last six months.

"Corn got a little reason to smile today," one US investor
told Agrimoney.com.

'Record low'

Wheat, however, received cause to grump, with stocks of the grain
as of December 1, at 1.46bn bushels, some 60m bushels above market
expectations.

"That was an indication that wheat feed use was not what
USDA thought it would be last summer," Mr Holaday said.

In fact, according to CHS Hedging, the figure implies that "wheat
feeding was a record low during the second quarter of the marketing year.

"This partially explains the high corn feeding during the
quarter."

Surprise planting
data

With wheat trading at a premium of well over $2.00 a bushel
for much of late 2013, it appears that many users, such as livestock feeders,
who could switch grains, did.

The USDA raised its estimate for US wheat stocks as of the
close of 2013-14, defying market expectations for a downgrade.

Sure, separate data on US wheat seedings were bullish, in showing
plantings at 41.9m acres (17.0m hectares), a drop of 2.2m acres.

Investors had expected a 410,000-acre increase in area to 43.5m
acres.

Lowest since 2010

But as an extra card for wheat bears, the US also raised its
estimate for world wheat production in 2013-14, by 1.2m tonnes to a record
712.7m tonnes, citing improved ideas on the Chinese and Russian harvests.

Chicago wheat for March fell 4% at one point, to $5.60 ½ a
bushel, the lowest for a spot contract since July 2010, before recovering a
little ground to end at $5.69 a bushel, a slide of 2.6%.

That cut the premium over corn to $1.36 ¼ a bushel – down 21%
on the day.

Paris wheat futures followed suit, with the March contract ending
down 1.9% at E193.00 a tonne, its weakest finish in three months.

That left the soybean end-stocks estimate for 2013-14 at
150m bushels, "still on the tight side," Mr Kahler told Agrimoney.com.

"The US balance sheet seems destined to remain at minimal
stocks level for another year with the demand from China," CHS Hedging said.

Soybeans for March ended up 0.4% at $12.78 ½ a bushel.

Cotton revisions

In New York, the Wasde also has a bearing on cotton – a negative one this time, on
the world stage, with the estimate for global inventories as of the end of
2013-14 raised by 1.2m bales to a record 97.6m bales, a reflection of higher
production hopes.

"Production is raised mainly for China, where government
classing data indicates that Xinjiang production, which accounts for about 60% of
the [domestic] total, may exceed 2012-13," the USDA said.

Still, domestically, while the USDA raised estimates for both
production and consumption, the result was a slightly lower stocks-to-use
figure, a small positive for prices.

Cotton for March ended down, but only by 0.3% at 82.59 cents
a pound, staying above its 100-day moving average.

Sugar recovers

Meanwhile, New York raw
sugar for March made small headway, settling up 0.6% to 15.57 cents a
pound, bouncing from a three-year low and recording its first winning session
of 2014.

Not that there appears much erosion of the bearish sentiment
on the sweetener.

"A weaker Brazilian real is generating selling pressure – it
is again nearing the lows it hit in August 2013 and is thus contributing to
higher sugar supply from Brazil, the world's largest exporter," Commerzbank said.

"Furthermore, Thailand, the number two exporter, has
reported a promising start to its harvest. According to official data, 67% more
sugar was produced in the first 42 days than in the same period last year."

Arabica coffee's
recovery, with the March contract adding 1.1% to 120.65 cents a pound for
March, appears more sustainable, coming against a backdrop of weakening hopes
for Brazilian production.